Marketing
Average customer lifetime
The reciprocal of the monthly churn rate gives the expected number of months a customer stays. It feeds straight into customer lifetime value.
The Formula
Lifetime = 1 / c
The reciprocal of the monthly churn rate gives the expected number of months a customer stays. It feeds straight into customer lifetime value.
| Symbol | Meaning | Unit | Notes |
|---|---|---|---|
| c | Monthly churn rate as a decimal | decimal | Must be the same rate and the same period used elsewhere. 0.04 gives 25.0 months. |
| L | Average lifetime in months | months | 1 / 0.04 = 25.0. Halving churn to 0.02 would double it to 50 months. |
What Each Symbol Means
cdecimal
Monthly churn rate as a decimal
Must be the same rate and the same period used elsewhere. 0.04 gives 25.0 months.
Lmonths
Average lifetime in months
1 / 0.04 = 25.0. Halving churn to 0.02 would double it to 50 months.
See It Worked With Real Numbers
A formula on its own does not tell you which number goes where. The how to calculate churn rate page applies this equation to a concrete case, shows every intermediate step, and names the mistakes that produce a wrong answer even when the algebra is right.
Where This Formula Appears
This equation is the working core of How To Calculate Churn Rate, filed under Business. Every number the guide produces comes from substituting into this one line.